Rice Watchdog Bantay Bigas calls for rice sufficiency for food security

Mariano also scored the attack Pid made against the NFA. The Pids blames the NFA for its allegedly costly program for rice self-sufficiency.

“What the Pids fails to mention is how that NFA incurred billions in debts precisely because of the privatization measures imposed upon the food agency as dictated by the country’s creditors led by the World Bank, the Asian Development Bank specifically through the Grains Sector Development Program (GSDP) it funded –which the PIDS mentioned in its paper as a step for reforms in the NFA — , the International Monetary Fund (IMF) and the US Agency for International Development (USAid).,” she said.

Mariano said that the NFA has been slowly divested of its income-generating functions such as wheat trading while it is slowly transformed from a public agency fulfilling a social responsibility to a facilitator for greater private profit at the expense of the taxpayers including the poor. She said that this year’s allocation of 660,000MT of rice importation by private rice traders cost the public P9 billion ($209 million) in foregone revenues from tariffs exemption subsidies (TES), which the government would otherwise tax itself with the NFA’s rice importation.

Asked for comment, Roman Sanchez, national president of the NFA-Employees’ Association (NFA-EA) said that reforms in the NFA should not translate to transferring to the private sector vital functions of the food agency. He said that neither should the NFA’s assets be privatized as it would only further tighten the private monopoly in rice marketing and trading .

(Photo by Dabet Castañeda / bulatlat.com)

“Privatization is one of the reasons why local rice is more expensive than world market prices. Reforms should manifest in the prosecution of the members of the NFA council who decided on the over-importation of rice and allowed the continued demise of the NFA for the last decade. The legitimate losses of the food agency should not be considered as a public loss but rather a social cost,’ he said.

Bantay Bigas said that the call for rice self-sufficiency is timely, appropriate and attainable.

“The country can achieve this through the implementation of a genuine agrarian reform program that provides land to the tillers for free. If the government can forego P9 billion ($209 million) to private traders who have the capital for business and profits generation, the government should all the more provide free land to the tillers. This program should be complemented by support subsidies for capital, inputs as well as provision of adequate post-harvest facilities and agricultural infrastructure support especially irrigation,” Mariano said.

Tons of rotting rice in warehouses

A leader of a farmers’ cooperative in San Miguel Bulacan, in the meantime, added fuel to the fire by saying how rice importation results in tons of local rice rotting. Farmer Simeon Sioson said that that NFA’s slow action in selling its old rice stocks is untenable and without merit. The NFA has previously said that its old rice inventory that serves as buffer stock will remain as inventory even if sold by NFA for as long as it is not resold by rice traders and consumed by the population.

“The NFA says that it is tasked to maintain a buffer stock, and because of this it doesn’t sell old rice in its warehouses. This is wrong. The population has a more or less fixed rate of rice consumption, so it does not mean that just because the NFA sells its old rice inventory, the rice will immediately disappear and there will be none left in the market. The rice just change hands, from the NFA to private rice traders, and it will remain as inventory for as long as it is not fully sold and eaten by the population,” said Sioson.
Sioson said that rice stocks that are not sold before it has deteriorated entail losses in precious public funds.

“The NFA continues to lose money because it keeps old and rotted rice in private warehouses Remilling costs are high, and remilling is need to maintain the quality appearance of the rice stocks. If remilling doesn’t work and the old rice can no longer be salvaged, the rice is sold for practically half the market price. Under proper inventory management, the NFA can maintain a buffer stock and at the same time prevent its stocks from rotting and stop financial losses, but the policy of privatization makes this impossible,” he said.
The farmer also expressed outrage over how the NFA continues to import large quantities of rice, clearly without regard to its rotting rice stocks in warehouses. He said that the NFA council and the NFA administration should be reminded that the NFA allowed the importation of some 650,000 metric tons of rice or roughly 13 million bags, which are scheduled to arrive sometime at the end of June 2011, or early in July.

(Photo by Ina Alleco R. Silverio / bulatlat.com)

“What will happen? The incoming importation is supposed to be done by the private sector through the NFA, which means that the rice will be immediately disposed of and sold by rice traders. It also means that the existing old rice inventory cannot be readily sold to the public because rice traders who the NFA allowed to import massive quantities of rice will have enough stocks that will last a long time,” he said.

On the other hand, Sioson said, if the old and poor-quality rice inventory is sold to small retailers and farmers’ cooperatives, they will not be able to resell the old stock unless it is sold to them at a huge discount by NFA –then for resale by them at slightly higher prices — because of its poor quality.

“In short, the importation and scheduled arrival of huge rice stock is premature and unnecessary. The rotting rice inventory should have been disposed of first—or its volume significantly reduced—while still of good quality, before scheduling the next importation and arrival of new rice stock. Any forthcoming or ongoing rice harvest should also be considered before deciding on the volume and timing of importation,” he said.